Pharos Gaming will revolutionize slots with smart phone app

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For more than 20 years, my father and I have implored our readers to kick the slot habit. The biggest reason for this is twofold.

First, the paybacks on slots are just too low. If I recall correctly, the State of Nevada reported the average payback on a slot machine last year was in the 92% range. You just don’t stand much of a chance.

The second reason is you have no clue what the payback is on any given machine. So, even though 92% is an average and there might even be some games paying as high at 98% (not very likely), you have absolutely no way of knowing which machine is doing this.

For the moment, I’ll leave off that playing a game with absolutely no strategy is not one I find very appealing to spend my time at.

Well, this past week at the Global Gaming Expo, I had a conversation with the founder of a company who appears to be trying to change some of these problems with slots. I find his attempts extremely noble.

I’m not necessarily convinced the casinos are going to support what he is suggesting – but time will tell.

The company trying to revolutionize the slot industry is called Pharos Gaming out of New York City. The gentleman I spoke to was Frank Abramopoulos and he is a director there. The concept is rather simple. Every one of their “Open Label” machines is given a unique digital code that is on the screen.

A player can then access an “app” on his smart phone and enter this code. This app will return to the player significant information about the slot machine. Most importantly, it will tell the player the payback of the slot machine.

As the company’s slot machines are all single-machine progressives, it will use the current size of the jackpot to calculate the precise theoretical payback of the machine.

With this single concept, Pharos Gaming has eliminated at least one of the basic problems with slot machines. Any player can now know the payback of a machine instantaneously. This is certainly progress. But, even if you know the payback of a game, I don’t recommend you start playing games at 92%.

However, because Pharos Gaming’s Open Label machines are stand alone progressives, the true payback of the machine to a single player is fully dependent on the size of that jackpot at any point in time.

So, in theory, a player can walk up to a bank of machines, punch in each of the special codes and then only play the game that shows a current payback of over 100%. This has been going on in the video poker world for years.

The only difference is for video poker, you don’t really need a smart phone, you just need to remember the payback of a few base pay tables and learn how to approximate the current payback based on a simple formula (I’ll cover this again in a future column).

But, progress is progress.

Explaining the math behind progressives has always been a tricky proposition. I have worked on many side bets for table games that utilize progressives and I’ve been amazed at how few in the industry fully understand how it works.

I won’t go through the details here, but the short version is you essentially have two paybacks. One is the long-term payback, which is the one the casino is worried about. The other is the specific payback at any point in time that the player should be focused on.

In the end, all the people who play on the progressive but don’t win it are playing below the long-term payback. The person who finally wins the progressive is playing above it if the jackpot grows to be larger than average (which will happen roughly half the time).

In the case of Open Label, the players who are oblivious to the feature that allows you to check the payback are essentially feeding the machine so those who are “in the know” can come along when the game goes positive and win the jackpot.

This works so long as you have the two classes of players – oblivious and in the know. If every player who ever plays these games became an in the know player, the model would fall apart. No one would ever play the slot when the jackpot is near the reset value as the machine would probably be playing at 92% or less.

So, how does this entire system differ from video poker and its progressives? From what Frank told me, the progressives on their open label add a large amount of each wager to the jackpot (he didn’t specify exactly how much).

Mathematically, this can increase the likelihood the game will go positive – assuming the hit frequency of the jackpot is low enough. The bad news is the only way to accomplish this is for the base payback at reset to be fairly low.

This requires they continue to get those oblivious players even while they are marketing towards the more knowledgeable ones.

In the case of video poker, the payback at reset is considerably higher than its slot machine counterpart and the amount of money added for each wager to the jackpot is relatively small.

Thus, video poker machines do not often get much above 100% (if at all) unless the base game is very close to 100%. At the same time, this means the player who doesn’t hit the jackpot is not giving up quite as much to the one who does.

I tip my cap to what Pharos Gaming is trying to accomplish. Any means by which players can gain more information about the game they want to play is a good thing. Also, there is some merit (and profit) in chasing games with paybacks over 100%.

However, a slot is still a slot and your chances of hitting that jackpot will be based 100% on luck. With video poker an expert player can gain advantage over others by modifying his strategy as the jackpot goes up and increase his chances of winning it.

Despite this change, I still implore you all to kick the slot habit and try video poker instead.

About the Author

Elliot Frome

Elliot Frome’s roots run deep into gaming theory and analysis. His father, Lenny, was a pioneer in developing video poker strategy in the 1980s and is credited with raising its popularity to dizzying heights. Elliot is a second generation gaming author and analyst with nearly 20 years of programming experience.

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